My Two Dollars

If you are like millions of other Americans, chances are that you are carrying around some debt on your credit cards. As of March 2010, U.S. revolving debt equaled $852.6 billion, 98% of which was from credit cards, and the average household carried $16,007 in credit card debt. That’s a lot of debt to have hanging over one’s head! With the economy the way it is, jobs being lost, and houses being foreclosed on, it’s a difficult time to try to get ahead and out of debt. But it’s vital that anyone who is in debt works to get out from underneath it, so I wanted to put together a list of things that could maybe help people get out of debt faster than if they were doing it without a plan. A long time ago I wrote a series called “The Start Digging Out Of Credit Card Debt Challenge” which you may want to check out in addition to what is to follow.

There are many different places to put away your monetary savings; under the mattress, in a shoebox, in a home safe, buried in the backyard… or a bank. Most people put their money in a regular old savings account at their bank, either because they don’t know there are better options or because they feel safer having it down the street in that little brick building. If that’s you, you may be missing out on a (now only slightly, but in the past much better) interest rate on your savings, as there is an alternative that acts pretty much just like a regular savings account but gives you a higher return on any money you just have sitting around waiting for use.

In the last three years I have lived in three different states and one of them twice. I lived in Southern California from 1996 – 2008, then in New Mexico from 2008 – 2009, then Colorado from 2009 – 2010, and then I arrived back in California again late last year to set up shop. The story behind all those moves is long-winded so I will spare you from the details, but that’s not really the point of why I am writing this post– I really wanted to discuss the cost of living in different communities and what effect that can have on your financial well-being and stability.

Nobody wants to be audited by the IRS, period. Although only about 1% of taxpayers actually get audited each year, many worry that this year may be the year that they get chosen for an in-person meeting with an IRS agent. Audits are not chosen at random willy-nilly, but rather by a computer-generated score given to each return by the IRS. Scored by their “discriminant function” system, or DIF, the computer takes into account common variables that may show a need for an audit. Once picked for an audit, an actual human agent takes a look at the return to determine if it is truly necessary or not.

What would you do with $10,000? That was the subject of a recent article over on CNNMoney.com, where the editors decided that because of this wishy-washy economy, you probably have cash sitting unused in an account somewhere — and that you should be doing something with it.